Questions about real estate lawyer's mortgages

Sunday

Feb 16, 2014 at 12:01 AM

Experts say Anne Weintraub violated mortgage terms by claiming more than one property as her primary residence.

By JOSH SALMAN

One of Southwest Florida's most prominent real estate lawyers financed more than $1 million worth of personal real estate during the boom — simultaneously claiming all three homes as her primary residence, which experts say violated her mortgage terms.

When the economy slumped into recession, that lawyer, Anne Weintraub, defaulted on those loans, costing a federally insured lender an estimated $500,000 in losses, according to a Herald-Tribune investigation.

Experts, shown the results of the investigation, said Weintraub provided false information to a regional bank when she refinanced loans on three separate properties — all within a few months of when the original mortgages were obtained.

In each case, Weintraub indicated the homes would be her primary residence, according to a review of Clerk of the Court documents and property records.

Banking and mortgage experts said that this designation would have let her qualify for more attractive interest rates and lower fees on her loans.

Weintraub denies any wrongdoing, and neither local law enforcement nor the Florida Bar are investigating her over any complaints.

“My personal and professional business dealings are — and have been — legal, appropriate and above board,” Weintraub wrote in a Jan. 30 email, part of a lengthy exchange following an initial lunch interview two days earlier. “Any allegations to the contrary are malicious, false and slanderous.”

During the Jan. 28 lunch interview, Weintraub said that the mortgage allegations and supporting public records provided anonymously to the Herald-Tribune were part of a “vendetta” against her, though she would not elaborate.

Weintraub said she intended to make each of the homes her primary residence.

After the anonymous package was left at the newspaper, the Herald-Tribune confirmed its accuracy through an independent review of official records.

Weintraub, 36, is regarded as one of the rising stars in Southwest Florida's legal industry, with local and regional accolades for her philanthropy and work in real estate law.

She sits on the board of overseers for a prominent Florida law school, participated in a task force to reduce foreclosure backlogs in the courts, and helped law enforcement investigate mortgage fraud following the housing boom.

That resume landed her on a list of Tampa Bay's “Top 25 People to Watch” in 2013, generated by the Tampa Bay Business Journal.

Experts contacted by the Herald-Tribune said the inaccuracies in Weintraub's mortgage documents allowed her to secure hundreds of thousands in loans she might not have been entitled to receive.

After defaulting on the loans, she sold each home through a short sale — resulting in a direct principal loss of as much as $537,500 to SunTrust Bank, court records show.

“It appears as if it is occupancy fraud,” said Gary Lacefield, a certified fraud examiner, who reviewed court documents detailing Weintraub's purchases and loans at the request of the Herald-Tribune. “It would be logistically impossible for someone to owner-occupy all of those properties at once. All of the red flags are there.”

The Herald-Tribune reviewed hundreds of pages of court documents related to Weintraub's personal mortgages. A trio of experts analyzed that same material at the news organization's request — each reaching similar conclusions.

Local bankers, attorneys and law enforcement agents also were asked about the documents without being provided Weintraub's name; they were told only that the documents pertained to a “prominent real estate lawyer.”

They warned that these loans appear to have violated federal and state statutes.

“Whenever you misrepresent as an applicant a material fact that the lender would use to make a decision, that could fall into mortgage fraud,” said J Scanlan, special agent supervisor with the Florida Department of Law Enforcement in Sarasota, who was not provided with Weintraub's name.

“When you talk about an insider in the industry, they should have known, and they definitely are held to a much higher standard.”

During the lunch interview, Weintraub provided no explanation for why the documents listed multiple homes as her primary residence, other than to claim the person who sent the material to the newspaper was out to get her.

She repeatedly declined requests for followup interviews, saying only that the claims were “baseless.”

After that meeting, Weintraub took to social media to defend herself and offered a $5,000 reward for the identity of the person who sent the documents to the Herald-Tribune. “I did not commit mortgage fraud,” she said during the lunch interview.

Properties in question

While working for prominent area law firm Icard Merrill in May 2005, Weintraub bought a 1,395-square-foot condo on Sarasota's Bentgrass Drive for $250,000.

She financed the deal with two loans from SunTrust Bank, indicating on loan documents that the condo would be her primary residence. At the time, she listed her mailing address as a unit in the Ritz-Carlton Sarasota, property records show. Since November 2004, that same Ritz-Carlton condo has been listed as her address with the Sarasota County Supervisor of Elections Office.

A clause in the mortgage used to purchase the Bentgrass Drive condo mandated that Weintraub “occupy, establish and use the property as the borrower's principal residence within 60 days.”

It also stated that Weintraub “shall continue to occupy the property as the borrower's principal residence for at least one year after the date of occupancy, unless the lender otherwise agrees in writing . . . or unless extenuating circumstances exist which are beyond the borrower's control.”

Three months later, Weintraub bought another condo in Longboat Key's Beach Harbor Club, this time for $355,000. On that deed, she again listed the Ritz-Carlton as her mailing address, records show.

She borrowed $355,000 from SunTrust to finance the deal without a down payment.

On those loans, Weintraub pledged that the Longboat Key condo would become her primary home, according to documents she signed.

In doing so, she violated the conditions of her previous mortgages because they still required her to be living at the Bentgrass Drive residence, according to 2005 promissory notes dated May 25 and Aug. 10.

The second page of a standard Florida mortgage form — like the ones that SunTrust used in Weintraub's transactions — indicates whether the loan is for a primary home, secondary residence or investment property. Secondary and investment loans require certain supporting documents, known in the industry as “riders.”

Records of Weintraub's transactions in official public files do not contain riders for either a second home or an investment property.

When questioned about the deals by the Herald-Tribune, Weintraub did not provide any written documents showing SunTrust had agreed to forgo the primary-residence stipulation.

She also did not offer any “extenuating circumstances,” which would have allowed her to avoid the primary-residence mandates under the language of her mortgage.

SunTrust declined to provide any documents related to the transactions, citing its private client relationship with Weintraub.

“You cannot have two primary residences — it's as simple as that,” said Dennis Black, a Port Charlotte property appraiser who has been enlisted as an expert witness on mortgage-related fraud cases for the Federal Financial Institutions Examination Council. “Therefore, the subsequent applications are fraudulent.”

Because SunTrust was the lender on each loan, experts say it would have been possible for the bank to have given Weintraub verbal consent to disregard the primary-residence clauses — even though the mortgages require that waiver in writing and it still would have violated the terms of the loan.

Weintraub provided no records of such a conversation. SunTrust cited the privacy of a client relationship when asked about such a waiver.

That conversation would have been unlikely because it would have meant the lender could no longer sell the loan on the secondary market, a common occurrence with home mortgages, said Mark Hanewich, a Sarasota real estate attorney.

Hanewich was among the sources who was not privy to Weintraub's identity.

“Primary-home loans are the best terms because they're the preferred product that the secondary buyer will be looking for,” Hanewich said. “If I'm the borrower, and I'm not living there in six months, I'm struggling because I don't have any kind of argument.”

Stipulations

A month after the deal for the Longboat Key unit, Weintraub refinanced her debt on that property for $361,300 with SunTrust — paying off the condo's existing $355,000 mortgage, records show.

She again declared the unit her primary residence, court records show. Experts said that violated the mortgage requirements for the Bentgrass unit stipulating that she “occupy, establish and use the property.”

That December, Weintraub refinanced the Bentgrass Drive condo with two additional loans from SunTrust. That financing allowed her to pay off the existing $250,000 note and resulted in at least $39,700 left over, according to the official records.

On those documents, she also indicated the Bentgrass Drive condo would stay her primary residence.

“She's got very big problems,” said Matt Weidner, a St. Petersburg foreclosure lawyer, who reviewed the documents at the request of the Herald-Tribune. “The feds have certainly prosecuted others for far less, and her position in this area is very problematic for her.”

Less than one year after the Longboat Key purchase, Weintraub bought a house at Stoneybrook in the Heritage Harbour Golf and Country Club in Manatee County.

That $435,049 acquisition represented her third local real estate holding, according to court and property records.

As with her previous two home deals, she listed a Ritz-Carlton condo as her mailing address. Weintraub told the Herald-Tribune at the lunch meeting that the condo belonged to her husband.

Weintraub correctly identified the Stoneybrook home as an investment property on her mortgages, borrowing $391,500 under those pretenses.

But two months later, Weintraub refinanced the Stoneybrook residence with two fresh SunTrust loans for a combined $409,500. This time, the property was listed as a primary residence on mortgage documents filed with Manatee County.

Notices of default

Weintraub received two notices of default in September 2009, followed by another foreclosure filing less than six months later.

She ultimately agreed to a short sale for all three properties, resulting in as much as $537,500 in principal losses for SunTrust, court records show.

It could not be determined whether bank loan underwriters ran credit reports on each loan or checked to see if the primary-residence clause or other stipulations were met.

During the mid-2000s housing boom, many lending standards were ignored, leading to defaults and a string of bank failures that helped push the nation into the deepest economic recession in 70 years.

Weintraub told the Herald-Tribune at the lunch interview that Sean McHale — now SunTrust's regional president — was personally aware of each of her loans.

McHale did not respond to multiple requests for comment.

But when asked about a potential waiver, a SunTrust spokesman said he was “not sure that would have been possible” because McHale worked in the bank's Tampa division until early 2008.

He did not have any responsibilities in Sarasota until that time — well after Weintraub's mortgages were originated.

The bank did confirm McHale “facilitated an introduction” to the company's loss mitigation department once Weintraub's loans became delinquent, as he has done for other clients.

“Once that introduction was made, he was no longer involved in the process,” bank spokesman Michael McCoy wrote in a statement.

The loan officer for each of the mortgages, who is no longer employed by the bank, could not be reached for comment.

SunTrust's mortgage department reviewed the matter at the request of the Herald-Tribune and declined further comment, citing client confidentiality.

'Held to a higher standard'

At the time of the defaults, Weintraub was specializing in transaction closings and foreclosure relief for delinquent borrowers and distressed-property owners.

She participated in a special judicial task force aimed at whittling down foreclosure backlogs in the Florida 12th Circuit, and hosted a weekly TV segment on the local ABC-TV affiliate, in which she offered guidance to distressed homeowners.

Weintraub also assisted law enforcement officials on mortgage fraud cases, she said.

A member of the Stetson University College of Law Board of Overseers, she also serves on the board of the University of South Florida's Sarasota-Manatee Campus, and has been chairwoman of both the Sarasota Association of Realtors and the Sarasota County Bar Association's Realtor/Attorney Joint Committee.

Next month, she is scheduled to be honored by Temple Sinai as its “Humanitarian of the Year” during an annual awards gala.

Legal experts told the Herald-Tribune that Weintraub's mortgages could warrant an ethics investigation from the Florida Bar Association, which regulates professional lawyer conduct and may suspend an attorney's license to practice in Florida.

The Bar has no open cases pending against Weintraub. She has no public disciplinary history.

Bar officials could not comment on specific circumstances involving an attorney, but said “honesty and integrity” are a top priority.

“Attorneys are dealing with people at their most vulnerable moments, and people entrust them with their livelihoods,” said Adria Quintela, director of lawyer regulation for the Florida Bar.

“They're absolutely held to a higher standard.”

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